What is the most feared and dreaded part of living in the Netherlands? The aspect that would make even the Prime Minister quake in his boots? The police? The cheese? The dijks bursting? If you suggested any of these, you’d be wrongity wrong wrong wrong.
So what is it then? Ask any Dutchie and they’ll tell you. It’s receiving the Blue Envelope. What’s the Blue Envelope? Why is it so feared? Let me explain.
The Blue Envelope is the Belastingdienst (Tax Office) getting in contact and most residents will receive them multiple times a year – income tax and road tax to name just two. You may have recently (or are about to receive) your Jaaropgaaf (group certificate, or end of year tax report) from your employer in the mail, which is the sign that you need to get yourself organised to submit your yearly tax return. We could go on and on about the intricacies of the Dutch tax system, but it is so complex (and so boring) that we will just keep it as simple and as hassle free for the average person as possible (average being employed and needing to submit a tax return).
In the Netherlands the tax year runs from January to December, unlike some other countries. For example, Australia’s tax year is from July to June, and the UK is the year beginning April 6. Also here in the Netherlands you are expected to lodge your tax return by April 1. The Belastingdienst (tax office) can issue you a fine if you don’t submit your tax return on time, although you can apply for an extension. It’s not likely that you’ll receive a fine in the mail after April 1, it’s more likely that you’ll be caught in one of the police blitzes that we often see here – where the police work together with the tax office to pull people off the freeway by running their car registration and then hitting them with all their unpaid fines/tax declarations. It’s an enormous fundraiser for the government.
When it comes time to complete your tax return, you’ll find that in principle the process is very easy. All you really need to do is go to the belastingdienst.nl website and download the aangifte (form) from here. This year, there is an option to wait until between March 1 and April 1 where you can download a partially completed version of the aangifte, which will have automatically populated data regarding your wage income and tax value of your home if you own yours. Once you’ve completed the form, all you have to do is submit it electronically. You will have calculated either how much you owe or are owed, so there won’t be any more (nasty) surprises.
You will also find out that the tax system is categorised into three “boxes.” The first box is for your primary income (salary, home etc), the second is for major shareholdings, and the third is taxable income from savings and investments (savings accounts, investment properties etc). It will depend on your personal situation if boxes two and three are even relevant.
It’s also interesting to note, that if you moved to the Netherlands during 2011 and only worked a portion of the year, you do not have to lodge a tax return this year. You are allowed to leave it until next year and submit a form for tax year 2011 and 2012 at the same time.
Something that we have so far neglected to mention is the DigiD (digital ID). To submit your tax online, or through a third party (accountant, tax adviser), you need to have a DigiD. Sounds easy. Ha! To apply for a DigiD you first go to the website and fill in the required details including your BSN (personal identity number used to connect you to all government systems), and personal information. You will then choose a username and password and once completed, a letter will then be sent to you (in the post) with a code that you need to activate back at the DigiD site within 20 days. If you don’t activate it, or you forget your username and password in the mean time, you will need to start over.
It’s a very common complaint amongst expats and internationals that dealing with the Belastingdienst is a complete nightmare. All of the information is in Dutch only, and there are many comments and complaints that telephone advisers refuse to speak English and there are no options to choose other languages when calling for advice (as there are in other countries when dealing with their respective tax offices). So what happens when you don’t speak the language? For many of us that means finding an accountant, or contacting one of the many expat tax specialists who can do this for us. All you need to do is Google “expat tax Netherlands” to see the many, many companies who offer their services.
But what if you don’t want to pay someone to do all of the work for you or you want to learn how to lodge your return? We have managed to dig up some links in English that should help you (at least a bit). First of all, there is information on the Belastingdienst website in both English and German although the information is primarily aimed at non-residents and there is not a form to complete your tax return if you are a resident and don’t speak Dutch. In this case, Google Translate will become your very best friend as you work through the form.
There is however, comprehensive information on how to obtain and use your DigiD in English, which can be found here.
Now, we haven’t even touched on the various toeslagen (rebates) that are available throughout the year. Depending on your income, you may be eligible for Zorgtoeslag (health insurance rebate), Huurtoeslag (rental rebate) and Kindertoeslag (childcare rebate). Nor have we mentioned the Gemeente Belasting or Water Belasting. Stay tuned for more information about those hot topics.
How do you cope with Blue Envelope Day? Do you have a trusted accountant who you leave in charge of your tax return? Do you speak Dutch and would like to volunteer your language skills to other International Almeerders who would otherwise struggle through their return, putting it off until the last possible minute?
Let us know, we’d love to hear from you.
And in the immortal words of the Belastingdients themselves: “leuker kan ik het niet maken, maar hoop wel makkelijker!”